Prepayment Penalty

PREPAYMENT PENALTY DISCLOSURE & SELECTION

"You" and "Your" refers to Borrower and Co-Borrower.

We believe you should have the ability to tailor the features of your mortgage selection to meet your individual needs. There are generally 4 Prepayment Penalty options. The most favorable rate programs have a 5-year Prepayment Penalty Period, next to that is the 3-year Prepayment Penalty Period, after that is the 1-year Prepayment Penalty, and finally No Prepayment Penalty.

The "BEST" Prepayment Penalty is the "Soft Prepayment" program because it is offers the best rate and is flexible. It is designed for the individual that plans to hold the mortgage for the duration of the Penalty Period (1, 3 or 5 years as explained below).

If you decide to sell the property to an unrelated third party before the end of the Prepayment Penalty Period, you will not be assessed a prepayment penalty, "No Penalty".

The "Soft" prepayment program allows you to make partial prepayments of up to 20% of the original balance during any 12-month period "without penalty" during the Penalty Period.

5-Year Soft Prepayment Penalty

The Penalty Period is the initial five (5) years of your loan. If you make a full or partial prepayment in any twelve (12)-month period that exceeds 20% of the original principal loan amount you will be assessed a prepayment charge. The prepayment charge will equal the amount of interest that would accrue during a six (6) month period on the amount that exceeds 20% of the original principal balance. No prepayment charge will be assessed if the property is sold to an unrelated third party or for any prepayment occurring after the Penalty Period.

3-Year Soft Prepayment Penalty

The Penalty Period is the initial three (3) years of your loan. If you make a full or partial prepayment in any twelve (12)-month period that exceeds 20% of the original principal loan amount you will be assessed a prepayment charge. The prepayment charge will equal the amount of interest that would accrue during a six (6) month period on the amount that exceeds 20% of the original principal balance. No prepayment charge will be assessed if the property is sold to an unrelated third party or for any prepayment occurring after the Penalty Period.

1-Year Soft Prepayment Penalty

The Penalty Period is the first year (1) of your loan. If you make a full or partial prepayment within the first twelve (12)-month period that exceeds 20% of the original principal loan amount you will be assessed a prepayment charge. The prepayment charge will equal the amount of interest that would accrue during a six (6) month period on the amount that exceeds 20% of the original principal balance. No prepayment charge will be assessed if the property is sold to an unrelated third party or for any prepayment occurring after the Penalty Period.

Standard Prepayment Penalty

The Penalty Period is for however many years your prepay is ( 6 months to 5 years ) on your loan. If you make a full or partial prepayment within the period that exceeds 20% of the original principal loan amount you will be assessed a prepayment charge. The prepayment charge will equal the amount of interest that would accrue during a six (6) month period on the amount that exceeds 20% of the original principal balance.

No Prepayment Penalty

No prepayment charge will be assessed for any prepayment at any time. This option is not available for credit scores below 600 & certain No Doc Loans.

*NOTE: The above guidelines are subject to change without notice